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Bulletin No. 3.]



[Mlscellaneoas Series.



DEPARTMENT OF AGRICULTURE AND TECHNICAL
INSTRUCTION FOR IRELAND.



"THE ANNUAL AUDir



^



A PAPER BEAD AT THE COXFESENCE OF

PBIirCIPALS OF TECHNICAL SCHOOLS

IN lEELAND.



BY






m



JAMBS W. DRURY,

Auditor f

LOCAL GOVERNMENT BOARD, IRELAND.






■y.'m

m

■;■#
■:^'

m



DUBLIN:

PRINTED FOR HER MAJESTY'S STAT [ONERY OFFICE,

BY ALEX. THOM <fe CO. (Limited), 87, 88, & 89, ABBEY-STREET.

1903.



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Bulletin No. 3.] [Miscellaneons Series.

DEPARTMENT OF AGRICULTURE AND TECHNICAL
INSTRUCTION FOR IRELAND.



"THE ANNUAL AUDIT."



A FAPES BEAD AT THE GOXFESEXCE OF

PBnrCIPALS OF TECHXICAL SCHOOLS

IN IRELAND,



BY

JAMES W. DRUBT,

Auditor,

LOCAL GOYERNMIENT BOAED; IRELAND.



DUBLIN:

PRINTED FOR HER MAJESTY'S STATIONERY OFFICE,

BY ALEX. THOM & CO. (Limited), 87, 88, & 89, ABBEY-STRBBT.



1903.



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xo



"THE ANNUAL AUDIT."

By James W. Dbury,
Auditor, Local Government Board, Ireland.



At the request of the Department of Agriculture and Tech-
nical Instruction for Ireland, and by permission of the Local
Government Board, I have attended this Conference to say a few
words on a subject which nearly concerns every accounting
officer present, and which is described on your agenda paper as
" The Annual Audit.'* The title is short, but comprehensive : a
full discussion of the subject would absorb more time than can
be devoted to it to-day. I must only endeavour to give some
few hints of a general character, which may prove useful to so
many of you, gentlemen, as have not hitherto had experience
of the limitations and obligations attaching to the administra-
tion of public monies and the rendering of the accounts
connected therewith.

The audit at once suggests the auditor. Of him I speak, not
only as an auditor of nearly fifteen years' standing, but from
the more intimate standpoint, so far as you are concerned, of
one who was previously an accounting officer to two local
authorities for some six or seven years.

The auditor should be treated with the respect which is due,
not necessarily to him as an individual, but to the Local Govern-
ment Board, whose representative he is. Every officer should
endeavour to establish with him relations of mutual confidence,
and should strive to secure that the minimum of trouble" and
labour should be imposed on him in the course of the audit.
It is hardly necessary to remark that trouble caused to the
auditor means trouble to the officer ; therefore, in his own inte-
rests the officer should have everything prepared for the audit,
so that he can, without delay, produce any document or turn
up any reference in the minutes that may be required.

On the other hand, the auditor should be considerate to the
officers with whom he comes in contact, and should be ever
ready to assist them, when appealed to, by affording such ex-
planations and advice as his experience and knowledge may
suggest ; and I think I can claim for myself and my colleagues
that this is our endeavour.

' I would impress on every officer the imperative necessity of
treating the auditor with absolute candour. The auditor is
obliged, in a very limited time, to audit accounts extending over



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six '6i''tV^6ive*'mdntkV"^-*?he case may be; he has many ac-
counts to deal with in the course of a year ; he cannot be ex-
pected to retain in his memory the details of each account ; he
must, therefore, rely for information on the accounting officer.

The officer should, when called on, afford the auditor every
information in his power, fully and promptly; there should
be no concealment : the truth, the whole truth, and nothing
but the truth, is what the auditor expects, and is entitled to
require. When asked to explain the circumstances lead-
ing up to certain expenditure no officer should withhold
from the auditor documents, minutes, or other evidence,
even though they are, or may appear to be, unfavourable
to the Committee. Complete information should be afforded
to the auditor, otherwise he is not placed in a position to deter-
mine the question under consideratiion dispassionately and
justly. Let me beg your attention to this matter.

Now as to some of the routine work. Of course, the first
essential is that the form of the accounts should be properly
designed so as to meet the requirements of the Local Govern-
ment Board, the Department, and the Committee. The form
of account is under consideration at the present moment, and
in due time the Local Government Board will intimate their
requirements in the matter.

Hardly less essential, however, from an audit point of view
18 it, that when the form is prescribed and the books printed,
the accounts should be written up in a neat, accurate, and
methodical manner. This work must progress steadily through-
out the year. The duty will occupy but little time if dischareed
immediately after each meeting at which payments are made;
but if allowed to go into arrear the task will be found irksome,
and will probably fall to be disposed of during some incon-
venient and busy season at the expense of neatness and accuracy.

Never use a knife or other eraser to obliterate an error in
your books of account. Every auditor is prepared to find that
an occasional error may have crept into the accounts of even
the most experienced and careful officer. He will not resent
the error, but cannot tolerate an erasure. When an alteration
becomes necessary rule out the erroneous figures with pen and
ink and insert over them the correct ones.

Should you ever fail to balance your accounts, and after
diligent search find you are unable to locate the error, acquaint
the auditor of the fact before he commences the audit. Never
present an account to your Committee for payment until you
have fully checked it, and certified its accuracy. This- should
in every case be done previous to the meeting.



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Kumber all receipts and payments consecutively in your
Receipt and Expenditure Book, and put corresponding numbers
on the appropriate vouchers. Keep your vouchers neat, not
crumpled or tossed ; fasten all vouchers for a single month
together.

Each item of receipt and payment should be supported by a
voucher. Sums received should be vouched: in the case of
remittances from the local authority, the Department, or other
public body, by the production of the advice note or letter;
fees from pupils, and miscellaneous sums, by the blocks of
your receipt books. Always give a receipt for each siun re-
ceived, and for this purpose use books with blocks numbered
consecutively in print.

Payments should be vouched, in the case of goods supplied
or work done^ by the production of the tradesman's account
and receipt; the former should contain details of the items
making up the amount charged, with dates. A bill comr
mencing '' To amount of account furnished," is useless, so far
as that amount is concerned. Receipts for salaries should
contain a statement showing the period covered by the payment.
Should a payment be in respect of a contract, the voucher should
bear a reference to the minutes of the meeting at which the
tender was accepted, and the tender itself with the advertise-
ment should be attached.

Audits will be facilitated, and much annoyance, trouble, and
loss of time, will be avoided if details such as I have indicated
be attended to. Officers would be well advised to keep their
books from time to time as if the audit were impending ike
next day or week. Time will be saved, and the audit rendered
easier, by the adoption of a system of references. Do not
be afraid to annotate your books. Should an expenditure be
proposed the legality of which is doubtful, but considered ex-
pedient, let a precis of the reasons which influenced the Com-
mittee to incur it be inserted on the minutes. Should the
members be divided in opinion as to the advisability of incur-
ring certain expenditure or making a payment, let the names
of the members voting for or against be recorded on the minutes.
In short, let the records of proceedings be fulL and complete, so
that you may always be in a position to refer to them in order
to satisfy, or answer questions put by the auditor. Officers may
thus not only greatly facilitate the auditor, but may safeguard
themselves, especially in cases where they are doubtful of the
legality of expenditure. In such caaes they would be justified
in asking that a note should be taken on the minutes of the
fact that they had raised the question for the consideration of
the Committee.

Our subject is the annual audit. The title is quite appro-
priate in the cases of Committees of Technical Instruction



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appointed by urban authorities ; but such Committees, if ap-
pointed by County or Rural District Councils, must close their
accounts half-yearly. ,A11 accounts must be closed so as to
synchronise 'with the financial year which ends on 31st March :
half-yearly accounts will, of course, also be closed to 80th
September.

' I understand that the Department will require financial re-
turns prepared from the accounts showing results for what
may be called the school year, which, I believe, closes on 31st
July. ' '

^ The preparation or furnishing of these returns need not per-
turb any officer who keeps his books properly written up and
posted. The receipts and payments of every month should be
totalled in the books, and these monthly totals can be trans-
ferred to the return, which, of course, would be printed in a
form suitable for the purpose.

The legal aspect of the audit might be discussed or explained
at considerable length; but I have already trespassed on your
time and patience, so must be brief.

The chief thing to remember in order to avoid surcharges
is that Committees are prohibited from making, and auditors
are prohibited from passing, illegal payments.

What are illegal payments ? Generally speaking, such pay-
ments as are made in respect of expenditure which is not
authorised by the statutes governing the proceedings of the
Committee.

It would be difficult to prepare a schedule of all the expen-
diture which would be legal, especially in the case of Technical
Instruction Committees, whose duties and powers vary with
circumstances ; but secretaries will keep themselves and their
Committees fairly safe from surcharge if, before expenditure
is incurred, the question is asked and answered in the affirma-
tive — " Have we lawful authority to incur this ? "

Two enactments must always be remembered — Section 47 (2)
of the Local Government (Ireland) Act, 1898 (which prohibits
the application of funds to purposes not authorised by statute),
and Section 19 (4) of the Agriculture and Technical Instruction
(Irelan'd) Act, 1899 (which forbids the application of money
except in accordance with a scheme, or for purposes, approved
by the Department).

I do not propose to mention in detail the provisions of the
statutes relating to audits, but I would suggest to all officers
that they should make themselves familiar with them, and to
assist them I give the principal references in order of date : —

(1.) Sections 11 to 18 of the Local Government (Ireland)
Act, 1871, as amended by subsequent Acts.

(2.) Section 248 of the Public Health (Ireland) Act, 1878.



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(3.) Sections 5 and 6 of the Technical Instruction Act, 1889.

(4.) Section 63 of the Local Government (Ireland) Act,
1898.

(5.) Article 19 of the Schedule to the Local Government
(Application of Enactments) Order, 1898.

(6.) Section 30 Agriculture and Technical Instruction (Ire-
land) Act, 1899.

(7.) The Orders of the Local Government Board which
apply to the accounts of County and District
Councils.

The Local Government ^Ireland) Act of the late Session of
Parliament has clauses dealing with audit matters ; but as the
Bill has only received Royal Assent, and is not yet printed, I
do not deal with them.

As I have already mentioned, no Order has yet been made by
the Local Government Board prescribing the form of accounts
to be used by Committees of Agriculture and Technical Instruc-
tion; the provisions of such an Order are at the present
time under consideration.

May I add, in closing, that I am aware it is the desire of the
Local Government Board that all officers of local authorities or
Committees who are desirous of discharging their important
and oftentimes onerous public duties in an efficient manner,
should be facilitated in every possible way, and thpy therefore
need have no hesitation in communicating with the Board
should matters of real difficulty connected with the accounts
arise.



A. T. A Oo. atd.)

600. Wt53n. 2. 1903.



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